But right in the middle of town stands a strategic outpost for Saudi Arabia’s global ambitions, although one that the Saudis appear loath to publicize.
The giant Motiva oil refinery, which just completed a $10 billion expansion that makes it the largest processor of gasoline, diesel and other petroleum products in the United States, is owned by Saudi Aramco and Royal Dutch Shell in a 50-50 partnership.
Saudi Aramco’s investment in the refinery expansion is meant to ensure that Saudi Arabia will retain an important market for its crude in the United States at a time when American politicians are declaring their intention to wean the country off imported oil. Adding to the urgency for the Saudis is the fact that the United States is vastly increasing its production and replacing OPEC crude with that from oil sands in Canada.
The expansion of the Port Arthur refinery comes during a particularly complicated period in United States-Saudi relations, as the two countries try to manage changes sweeping the Arab world. While Riyadh has cracked down on dissent and generally resisted efforts to spread democracy in the region, the Obama administration has been less resistant to the changes.
But the Saudis have helped the United States and the global economy by increasing exports to moderate oil prices and top up worldwide supplies as the West applies sanctions against Iran. Saudi Arabia has been able to tap into its spare capacity, mostly lower-quality heavy sour crudes, to stretch its exports. Most refineries cannot easily process those crude oils, but the expanded Motiva refinery here can, freeing other Saudi grades for other markets.
“The Saudis are securing a home for their heavy crude,” said Fadel Gheit, a senior oil analyst at Oppenheimer Company. “But there is no question that security is also part of the equation. In Saudi Arabia, oil and politics always mix.”
The refinery expansion, which has had its share of cost overruns and mishaps, is nothing if not mammoth. It contains a million feet of pipe and a thousand miles of instrument cables; 63,000 concrete pilings were driven into the swamplands to stabilize the skyscraping distillation and heating towers.
But what is almost hidden at this marvel of chemical engineering is the critical Saudi Arabian presence, aside from a couple of Saudi Aramco coffee-table books on display in the executive offices and a pair of Saudi and Saudi Aramco flags inside the refinery’s small museum. Tucked away in an administration building, the museum also includes photographs of some visiting Saudi Aramco executives. Only a couple of Saudi trainees work at the plant, which has roughly 2,000 employees and contractors.
“They want to be relevant but invisible,” Lawrence J. Goldstein, a director of the Energy Policy Research Foundation, which is partly financed by the oil industry, said of the Saudis.
He added, “The Motiva relationship guarantees the Saudis an important but subtle footprint in the United States, and they want to have some negotiating strength when geopolitical issues in the Middle East and elsewhere arise.”
The importance of the refinery to Saudi Arabia has been underscored by Khalid Al-Falih, Saudi Aramco’s president and chief executive, who has visited the refinery twice in the last year and is scheduled to come back again in a few months.
“Our commitment to this market is unwavering,” he told energy executives at the IHS-CERA energy conference in Houston in March shortly after his most recent visit.
Brett D. Woltjen, the refinery’s production manager, said that Mr. Al-Falih did not come with much fanfare.
“He does have his team of people but it’s small,” he said. “It doesn’t feel like we’re being invaded.”
Saudi Aramco is already the world’s biggest oil company with monopoly rights over Saudi Arabia’s 260 billion barrels of proven oil reserves and the world’s fourth-largest natural gas reserves. But with the Motiva refinery’s increased capacity, the Saudi company is also now well on its way to achieving its goal of surpassing Exxon Mobil as the world’s largest refiner in the next few years, with joint ventures in places like China, South Korea, India and the Netherlands.
Article source: http://www.nytimes.com/2013/04/05/business/texas-refinery-is-saudi-foothold-in-us-market.html?partner=rss&emc=rss